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December 20, 2007 |
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INDOSAT: Temasek Files Appeal Against Court Ruling PT Indosat Tbk's shareholder, Singapore state investment arm Temasek Holdings, filed an appeal against an Indonesian court ruling that said it broke antitrust laws through stakes in the country's two biggest mobile-phone operators, various reports say. An analyst at DBS Vickers Research Singapore told Bloomberg News that Temasek will use the legal process to appeal the ruling and the worst-case scenario is a tariff cut will be imposed on the Indonesian mobile-phone companies. According to Reuters, Temasek Managing Director of Corporate Affairs Myrna Thomas said the appeal was filed with the District Court of Central Jakarta and a ruling is expected within 30 days. As reported by the Troubled Company Reporter-Asia pacific on Nov. 23, 2007, Temasek Holdings was found guilty by the Business Competition Monitoring Commission (KPPU) of violating Indonesia's anti-monopoly laws. Temasek violated the country's anti-monopoly laws through its ownership in PT Indosat Tbk and PT Telekomunikasi Selular Indonesia. The TCR-AP related that KPPU ruled that Temasek must sell its minority stake in either Telekomunikasi Selular or Indosat. Syamsul Maarif, KPPU commission assembly chairman, reportedly said the shares must be sold within two years at the maximum since the decision has legal grounds. Bloomberg notes that Todung Mulya Lubis, the Jakarta-based lawyer representing Temasek, said Indonesia's regulator has "no legal authority" to order the divestment of the stakes. KPPU also ruled that Temasek's units should also pay IDR25 billion in fines. Furthermore, Mr. Maarif said Temasek should also let go of the voting rights and the right to install a commissioner director in one of the companies to be released. Temasek told Agence France-Presse that it is not guilty of breaking anti-monopoly laws and vowed to fight the KPPU ruling. Furthermore, Kevin Lim of Reuters writes that Temasek disputed the findings, noting its indirect stake in Telkomsel is smaller than the Indonesian government's. Ms. Thomas was quoted by AFP as saying, "The case against Temasek is baseless and totally without merit. We are filing an appeal to demonstrate that there is no basis for the KPPU decision and to ensure that Temasek's legal rights under the laws of Indonesia are respected at all times." About Indosat PT Indosat Tbk -- http://www.indosat.com/ -- is a fully integrated Indonesian telecommunications network and service provider and provides a full complement of national and international telecommunications services in Indonesia. The company provides international long-distance services in Indonesia. It also provides multimedia, data communications and Internet services to Indonesian and regional corporate and retail customers. The company's principal cellular service is the provision of airtime, which measures the usage of its cellular network by its customers. Airtime is sold through postpaid and prepaid plans. It provides a variety of international voice telecommunications services and both international switched and non-switched telecommunications services. MIDI services include high-speed point-to-point international and domestic digital leased line broadband and narrowband services, a high-performance packet-switching service and satellite transponder leasing and broadcasting services. * * * The Troubled Company Reporter-Asia Pacific reported on June 19, 2007, that Moody's Investors Service affirmed PT Indosat Tbk's Ba1 local currency issuer rating and has also changed the outlook to stable. At the same time, Moody's affirmed Indosat's Ba3 senior unsecured foreign currency rating. The rating outlook on the bond remains positive which is in line with the outlook on Indonesia's foreign currency country ceiling. A TCR-AP report on June 7, 2006, stated that Fitch Ratings affirmed PT Indosat Tbk's long-term foreign and local currency Issuer Default Ratings at 'BB-'. The outlook on the ratings is stable. |
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